Cibus Announces $13.0 Million Registered Direct Offering

Rhea-AI Summary

Cibus has announced a $13.0 million registered direct offering. The company will sell 1,298,040 shares of its Class A Common Stock and warrants to purchase up to 1,298,040 shares at $10.00 per share for institutional investors and $10.20 per share for the CEO, Rory Riggs. The warrants, exercisable immediately, will expire in five years. Gross proceeds from the offering are approximately $13.0 million before expenses. Closing is expected on June 13, 2024. The funds will support the development of new and existing seed traits, Trait Machine operations, and general corporate purposes. A.G.P./Alliance Global Partners is the sole placement agent.

Positive

• Cibus will raise approximately $13.0 million in gross proceeds.
• Funds will support further development of new and existing seed traits, Trait Machine operations, and general corporate purposes.
• Warrants are exercisable immediately, providing potential future liquidity.
• Participation by CEO Rory Riggs indicates strong internal confidence.

Negative

• The offering may lead to shareholder dilution with the issuance of 1,298,040 new shares.
• Warrants being exercisable at $10.00 could lead to future stock price pressure.
• Net proceeds will be lower after deducting placement agent fees and other expenses.
• The offering is dependent on the satisfaction of customary closing conditions, which introduces potential risks.

Insights

Financial Analyst

Cibus' recent direct offering to raise approximately $13.0 million is a strategic financial maneuver aimed at bolstering its gene editing technology in agriculture. This move, involving institutional and strategic investors, highlights confidence in the company's innovative capabilities. By issuing 1,298,040 shares of Class A Common Stock and an equal number of warrants, Cibus ensures immediate liquidity while providing a future opportunity for investors to benefit from potential stock appreciation.

This capital influx is pivotal for advancing their Trait Machine operations and further developing seed traits. For retail investors, it's worth noting that the offering price for the stock and warrants is $10.00 per share, with the CEO paying a slight premium at $10.20 per share. The inclusion of warrants adds a layer of complexity; these are exercisable immediately at $10.00, with a five-year expiration period. The warrants' redeemable feature, contingent upon the announcement of an operational soybean platform, could be an indicator of anticipated milestones that might drive stock value.

Retail investors should weigh the potential dilution against the strategic advantage of the raised capital. Historically, stock offerings can lead to short-term stock price declines due to dilution, but if deployed effectively, the long-term benefits can outweigh the immediate impacts. Cibus' choice to use the proceeds for operational enhancements rather than merely covering operational costs is a positive signal. It shows a commitment to growth and innovation rather than simply maintaining the status quo.

Market Research Analyst

This direct offering by Cibus, raising $13.0 million, illustrates a targeted effort to attract strategic and institutional investment. Strategic investors often bring more than just capital; their involvement can offer industry-specific insights and networks that can catalyze growth. The inclusion of the company's CEO, Rory Riggs, in the purchase underscores internal confidence in the company's trajectory.

For retail investors, the market perception of this capital raise is crucial. Direct offerings, while potentially dilutive, can signify robust investor trust and future value creation. The earmarked funds for developing new seed traits and enhancing Trait Machine operations suggest focused growth areas. This aligns with market trends favoring innovation in agricultural biotechnology, a sector poised for significant advancements due to increasing global food demand and climate change challenges.

The redemption feature of the warrants, hinging on operational milestones related to the soybean platform, adds a speculative element. It implies that Cibus anticipates tangible progress in this area, which could be a game-changer in agricultural biotechnology. Retail investors should monitor how these developments align with broader industry trends and how Cibus positions itself against competitors in this niche market.

SAN DIEGO, June 12, 2024 (GLOBE NEWSWIRE) -- Cibus, Inc. (Nasdaq: CBUS) (the “Company” or “Cibus”), a leading agricultural biotechnology company that uses proprietary gene editing technologies to develop plant traits (or specific genetic characteristics) in seeds, today announced it has entered into securities purchase agreements with institutional, strategic and existing investors of the Company, as well as with the Company’s CEO, Rory Riggs, for the purchase and sale of 1,298,040 shares of its Class A Common Stock, par value $0.0001 per share, and warrants to purchase up to an aggregate of 1,298,040 shares of Class A Common Stock, at a combined purchase price per share (and accompanying warrant) of $10.00 for the institutional, strategic and existing investors and $10.20 for the Company’s CEO, pursuant to a registered direct offering. The warrants will be exercisable immediately at a price of $10.00 per share, except that the warrants issued to Mr. Riggs will have an initial exercise price of $10.07 per share, and will, in each case, expire five years following the date of issuance. The warrants, however, will be redeemable, at the Company’s option, at a redemption price of $0.0001 per warrant following the Company’s public announcement of an operational soybean platform and the satisfaction of a trading price condition.

The gross proceeds of the offering will be approximately $13.0 million before deducting placement agent fees and other estimated offering expenses. The closing of the offering is expected to take place on or about June 13, 2024, subject to the satisfaction of customary closing conditions. The Company intends to use the net proceeds from the offering to fund further development of new and improvement of existing seed traits, Trait Machine operations, and for working capital and general corporate purposes.

A.G.P./Alliance Global Partners is acting as sole placement agent for the offering.

This offering is being made pursuant to an effective shelf registration statement on Form S-3 (File No. 333-273062) previously filed with the U.S. Securities and Exchange Commission (the “SEC”) and declared effective on October 27, 2023. A prospectus supplement describing the terms of the offering will be filed with the SEC and will be available on the SEC’s website located at http://www.sec.gov. Electronic copies of the prospectus supplement may be obtained, when available, from A.G.P./Alliance Global Partners, 590 Madison Avenue, 28th Floor, New York, NY 10022, or by telephone at (212) 624-2060, or by email at prospectus@allianceg.com.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Cibus

Cibus is a leader in gene edited productivity traits that address critical productivity and sustainability challenges for farmers such as diseases and pests which the United Nations estimates cost the global economy approximately $300 billion annually. Cibus is not a seed company. It is a technology company that uses gene editing to develop and license traits to seed companies in exchange for royalties on seed sales. Cibus' focus is productivity traits for farmers for the major global row crops with large acreage such as canola, corn, rice, soybean, and wheat. Cibus is a technology leader in high throughput gene editing technology that enables Cibus to develop and commercialize plant traits at a fraction of the time and cost of conventional breeding. Cibus has developed a pipeline of five productivity traits including important traits for Pod Shatter Reduction, Sclerotinia (disease) resistance, and weed management. Its initial traits for Pod Shatter Reduction and weed management are in commercial development with leading seed companies such as Nuseed Americas Inc. in Canola as well as Nutrien Ltd. and Interoc S.A. in Rice in the United States and Latin America. Its other pipeline traits including Sclerotinia resistance are in advanced greenhouse and field trials stages.

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. In some cases, you can identify these statements by forward-looking words such as "anticipates," "believes," "continue," "estimates," "expects," "intends," "may," "might," "plans," "predicts," "projects," "should," "targets," "will," or the negative of these terms and other similar terminology. Forward-looking statements in this press release include, but are not limited to, statements regarding the anticipated closing of the offering and the expected use of the proceeds from the offering. Completion of the offering is subject to numerous factors, many of which are beyond Cibus’ control, including, without limitation, market conditions, failure to satisfy customary closing conditions and the risk factors and other matters set forth in the prospectus supplement and accompanying prospectus included in the registration statement and the documents incorporated by reference therein. You are cautioned not to place undue reliance on any forward-looking statements made by Cibus’ management, which are based only on information currently available to it when, and speak only as of the date, such statement is made. Cibus does not assume any obligation to publicly provide revisions or updates to any forward-looking statements, whether as a result of new information, future developments or otherwise, should circumstances change, except as otherwise required by law.

CIBUS CONTACTS:

INVESTOR RELATIONS
Karen Troeber
ktroeber@cibus.com
858-450-2636

Jeff Sonnek – ICR
jeff.sonnek@icrinc.com

MEDIA RELATIONS
Colin Sanford
colin@bioscribe.com
203-918-4347

FAQ

What is the value of the Cibus registered direct offering?

The Cibus registered direct offering is valued at approximately $13.0 million.

When is the closing date for the Cibus registered direct offering?

The closing of the Cibus offering is expected on or about June 13, 2024.

How many shares are being sold in the Cibus direct offering?

Cibus is selling 1,298,040 shares of its Class A Common Stock.

What is the exercise price for the Cibus warrants?

The exercise price for the Cibus warrants is $10.00 per share, except for CEO Rory Riggs, whose warrants have an initial exercise price of $10.07.

What will the proceeds from the Cibus offering be used for?

The net proceeds will be used for developing new and existing seed traits, Trait Machine operations, and general corporate purposes.